A Federal Court judge has ordered a research firm linked to Storm Financial to pay more than 70 per cent of ASIC’s court costs in a legal matter involving both parties.
On 23 September, Justice Greenwood found in favour of the corporate regulator for Ignite Financial Systems & Research Pty Ltd to pay 75 per cent of ASIC’s court costs.
ASIC commenced the proceedings against Ignite in March 2009 after Ignite refused to provide the regulator with, among other things, books, manuals, software applications, electronic records and books relating to clients of Storm and the Phormula software.
Prior to the legal proceedings, Ignite, through its legal representatives Russell and Company, and Storm directors Emmanuel and Julie Cassimatis, sought an extension from ASIC regarding its request.
The regulator then put a proposal of an open offer on behalf of ASIC to settle the proceedings on the foundation that Ignite consent to a court order that the proceeding be dismissed and that there be no order as to costs.
While Russell said Ignite would be happy to consent to a settlement arrangement, it did not believe such an arrangement “would be of sufficient assistance to ASIC”.
Russell said some of the documents sought by the notice did not exist and others, although mis-described, had been produced.
After the proceedings were adjourned, ASIC called for the court’s discretion to either order Ignite to pay its costs and incidentals for its application or find no order as to costs.
Ignite contended the discretion ought to be exercised so ASIC paid Ignite’s costs of and incidental to the proceedings.
“I am entirely satisfied that ASIC acted reasonably in commencing the proceedings on 26 March 2009,” Justice Greenwood said.
“The chronological sequence of exchanges reveals that Ignite and Mr and Mrs Cassimatis were not willing to comply with the notice because they believed that there was no practicality or utility in doing so; they believed that an alternative approach to providing the information and documents could and should be formulated and adopted by ASIC.
“They believed that it was not necessary for ASIC to insist upon compliance because they had formulated a view that Mr Lalor could provide assistance to ASIC officers in interrogating documents and a database which would give ASIC everything it wanted.”
